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The Job Support Scheme And What it Means For You And Your Employees

The Job Support Scheme And What it Means For You And Your Employees
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Managing Director

The Job Retention Scheme (Furlough) is ending on the 31st of October and being replaced by the Job Support Scheme. On top of the announcement, further changes to this scheme have been announced and the results have left many employers and employees alike confused as to what it means for them. 

There are just a few days until the end of the Job Retention Scheme (or Furlough Scheme as it is commonly known) and the introduction of the Job Support Scheme. After much dissent over the original proposal, the Job Support Scheme has been revised to provide greater levels of assistance to those businesses still struggling with the effects of the pandemic. So, what does the new scheme offer?

First, the scheme is actually two schemes: Job Support for those businesses remaining open (JSS Open) and those businesses that have been forced to close (JSS Closed). Both schemes begin on the 1st  November 2020 and will run until the end of April 2021 and both are open to employers whether or not they have previously used the Furlough Scheme.

JSS Open aims to help businesses where Coronavirus restrictions have significantly impacted the demand for their services thus reducing their turnover and putting jobs at risk. It is not sector specific and is open to all employers with a UK bank account and a UK PAYE scheme unless they’re fully publicly funded bodies. SMEs will not have to meet any financial test or prove they have been impacted, whether they’re claiming for JSS Open or JSS Closed.

How it works:

Employees must be working at least 20% of their hours to be eligible for the scheme which works by topping up their wages for most of the hours they would normally work but have not.

How they are paid for the hours not worked is split into three portions. 5% is paid by the employer (capped at £125), the government pays 61.67% (capped at £1,541.75 per month)) and the remaining time is unpaid unless the employer elects to pay it.

For an employee working the 20% minimum of their normal hours, they would receive 73% of their normal pay. Of this 73%, 20% would be pay for hours worked, 4% would be employer top-up and 49% would be government top-up.

The employer pays the whole salary initially and the government reimburses the company for its share.

Caps are based on a monthly reference salary of £3,125 which is calculated including regular wages, non-discretionary pay for hours worked, non-discretionary commission payments, non-discretionary fees and piece-rate payments. Discretionary payments such as tips and benefits in kind are not included.

Current guidelines suggest employees will be able to move between being on and off the scheme should their working patterns change month on month. The Government will be giving further guidance on this. Hours spent in training count toward the 20% total. Additionally, employees may have commenced work for the company after March 2020 as long as they have been on the payroll by 23rd  September.

Should a business need to make an employee’s position redundant, they can move them off the JSS and do so but they must stop claiming the grant for that position.

Larger employers with 250 employees or more will be subject to financial impact testing. How the test is conducted depends on the frequency VAT returns are submitted. For quarterly submissions, compare total sales figures posted between 31st  August 2020 and 7th  November 2020 with the same quarter in 2019. Monthly VAT returns require the three consecutive months (due to be filed and paid by November 7th) to be compared with the same period in 2019. Infrequent filings should be compared as per monthly returns however, a company must have submitted a VAT return between 31st  August and 7th  November to qualify for the scheme.

It’s important to note, JSS Open runs alongside the job retention bonus, so businesses can still claim their £1000 bonus for each furloughed employee they bring back to work. These employees will have to remain continuously employed until the end of January 2021 and earn a minimum of £1560 gross during that time.

JSS Closed is an extension to the original JSS and is designed to support businesses required to close due to tighter local or national coronavirus restrictions. The government will pay two-thirds of wages capped at £2,100 pm. Employees will have to be off for a minimum of seven days to be eligible.

It covers businesses with premises restricted to collection or delivery only so take-away food venues are now covered under this scheme.

If you’re an employer with a UK bank account and a UK PAYE scheme register on or before 23rd  September 2020 you can claim. The scheme is not limited to a specific sector. However, the scheme will not cover:

  • Businesses legally allowed to stay open but whose trade is significantly affected by a local lockdown
  • Businesses able to stay open but experience significantly reduced demand
  • Businesses that take the decision to shut because of reduced demand
  • Businesses required to close by local public health authorities due to specific workplace outbreaks.

It’s important to note, neither scheme covers Class 1 Employers NICS or pension contributions although the employer will still be liable to pay these for the government top-up, employer top-up and for hours actually worked.

Inarguably, the Job Support Scheme is less generous than the Job Retention Scheme but, hopefully, it will be a lifeline to many businesses during this on-going pandemic. Further clarification of the JSS is expected over the coming days.

ASL Recruitment was established in 1999 and has been serving Hastings and the surrounding area ever since placing temporary and permanent roles across a variety of sectors including Industrial and Manufacturing, Legal, Finance, Marketing, Technology and Office Support, from junior up to board level. Our co-founder and Managing Director, Jason Perry is an HR specialist and a Chartered Fellow of the Chartered Institute of Personnel and Development. For further information on our recruitment or consultancy services, email [email protected] or call us on 01424 452999.